Buyers “sit on fire” when real estate prices continuously escalate before the risk of inflation, many project owners “reassurance” in this way.
The latest report of Cushman & Wakefield Vietnam has shown that the real estate market price level in Ho Chi Minh City continues to peak in the first quarter of 2022. In which, the average price apartment segment of the whole market reached 3,300 USD/m2 (equivalent to 75.4 million VND/m2), up 8% QoQ and 27% YoY. The selling price of the apartment market has continuously peaked in the past 10 years, mainly due to the increase in land prices in the context of limited land fund, increasing cost of construction materials and the market’s acceptance of many products in the luxury segment. and luxury drives average prices up accordingly.
Meanwhile, the selling price of townhouses in Ho Chi Minh City is 3 times higher than the selling price in neighboring provinces. Specifically, the average selling price in Ho Chi Minh City reached 7,580 USD/m2 (equivalent to 173 million VND), up 30% QoQ and 42% YoY.
Along with the scarce supply, the inflation risk is also the reason why housing prices continue to skyrocket.
Right in the first months of the year, the pressure to control inflation in Vietnam has become an important issue raised in macroeconomic management. According to data from the General Statistics Office (Ministry of Planning and Investment), on average, in the first two months of 2022, CPI increased by 1.68% over the same period last year, core inflation increased by 0.67%. According to analysis by economic experts, three main reasons for inflation in 2022 include a sudden increase in aggregate demand during the period when the economy recovers from the pandemic; the dependence of the Vietnamese economy on imported raw materials; and disruption of global supply chains.
In 2022, the National Assembly of Vietnam sets the CPI target to increase by about 4%. At the time of January, this was considered a target that was completely “within reach” of Vietnam. However, after the sudden fluctuations of the world economic – political situation, this goal became a big pressure.
Real estate businesses promote “demand stimulation” against the risk of inflation with flexible payment policies
In that context, according to Dr. Su Ngoc Khuong, Senior Director of Savills Vietnam, real estate has always been evaluated as a shelter channel to help reduce risks when the inflation rate is high. Even so, large bursts of inflation can also stifle economic growth and reduce demand for property to rent or buy.
That is why, many real estate investors are now “stimulating” liquidity with a series of “strong hand” incentive policies for homebuyers. Observe, even these policies have never appeared in previous sales. This is also seen as a way for developers to “reassurance” home buyers in the context of inflation.
For example, at the Westgate project (Binh Chanh), An Gia investor is applying a quite flexible sales policy. Accordingly, buyers only need to pay up to 699 million VND and stop making further payments until they receive the house in the fourth quarter of 2023. For the rest, the investor supports interest rates, graces the principal until receiving the house, and at the same time, commits to a profit of up to 18%.
Thus, with an initial payment of only VND699 million, customers can own apartments with more bedrooms or buy multiple apartments at the same time for investment purposes. By the time of receiving the house, the profit can be achieved from 70-200% when the average apartment price increase margin of 10-30% after 1-2 years.
According to the representative of this unit, the policy is designed to suit young families who use financial leverage to buy a house. From an investment perspective, this policy also brings great advantages to investors with low capital.
Similarly, Nam Long Group also “strongly” introduced sales policy for the next phase of two projects, Mizuki Park (Binh Chanh) and Akari City (front of Vo Van Kiet, Binh Tan Ward, City). Ho Chi Minh City). Accordingly, with the Flora apartment line of the Akari City project, the buyer pays 50%, the payment schedule is up to 30 months. Thus, with an apartment with an estimated price of about 2.7 billion VND/unit, customers only need to pay about 1.4 billion VND. Along with that, the investor also launched two remarkable preferential policies in parallel. Policy 1, exempting 2 years of management fee from the time the investor notices the house handover; and policy 2, for those who use leverage to buy an apartment, which is to reduce the interest rate to 0%/year within 16 months and to grace the principal for 16 months or to fix the loan interest rate at 6%/year in 24 months and grace period of principal.
With the Mizuki Park project, this investor also “stimulates demand” with attractive policies. Specifically, the buyer pays 50% until handing over the house, at the same time, applies a loan package of 0%/year within 12 months and a grace period for the principal or a fixed loan package with a fixed interest rate of 6% within 24 months and a grace period. such a limit of time.
According to experts, the strong support in payment is how investors share difficulties with home buyers, in the context of continuously escalating real estate prices.
Another investor, Phu Dong Group, also recently announced an attractive sales policy, in the context of escalating real estate prices, the ability to own a residence of real residents is further away. Accordingly, with the Sky Garden project, this investor has a payment policy of 20%, the bank lends 50% during 2 years of construction at 0% interest rate, graces the principal within 24 months until receiving the loan. House. At the same time, launching the program “strong faith – durable value”, the investor commits to buy back the house with an interest rate of 12%. Thus, a 70m2 apartment costs about 2.8 billion VND, young people only need to have a modest accumulated capital of about 560 million VND to be able to buy a house. In the remaining two years, buyers will have time to balance cash flow when handing over the house, minimizing financial pressure.
According to Mr. David Jackson, General Director of Colliers Vietnam, the attractive incentive policies of some investors that are being applied can be seen as a move to share difficulties, accept less profit and contribute to the market. more vibrant school.
Notably, incentive programs are often directed to young families with real housing needs, wanting to own the first apartment to settle down. The fact that many young families have to use financial leverage to buy a house and getting a reasonable price, suitable prepayment, flexible payment… in this period are incentives that are harder to find in the market. the “normal” phase. This makes support policies more meaningful and practical.
According to this expert, in the context that the price of construction materials is increasing “gallopingly”, causing the total construction cost to increase by 20-30% compared to the same period last year, the pressure to increase The prices of apartment projects are more and more fierce. Surely many people with real housing needs are also “sitting on the fire” when real estate prices tend to continue to increase, making the dream of settlement more remote. These are understandable concerns, especially in the context that the supply of apartments continues to be scarce while the land bank in large urban areas is gradually “drained”. Therefore, finding a suitable project and being applied by many supportive policies by the investor will help families with real housing needs relieve the pressure knowing that the dream of owning an apartment in the city is still there. within reach and gradually becoming a reality.
“For investors, enjoying many incentives during this period will help them have the opportunity to earn better profits in the future. In addition, they also have more conditions to allocate capital into There are investors who believe that a new growth cycle is starting and need to “take advantage” of this time. Business is on the rebound, bringing a lot of optimistic signals to the real estate market,” emphasized Colliers Vietnam expert.
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